VW supplier dispute stalls car production

A long running supplier dispute hit production of Volkswagen's popular Golf and Passat models this week.

The dispute involved two European suppliers who halted deliveries of components, causing major disruptions at six Volkswagen factories in Germany. The company put nearly 28,000 production staff on reduced hours.

The sides are now understood to have come to a resolution, but VW has previously been accused of having an “incredibly adversarial” approach to their supplier relationships in a survey of automakers.

In a statement on Monday VW said a district court in Germany had issued an injunction obliging the suppliers to resume delivery of components, but said the suppliers had not complied.

“Given that further developments are not foreseeable, Volkswagen is making arrangements for various flexibilisation measures extending as far as short-time work,” the company said in a statement at the time.

The Financial Times has since reported VW has reached agreement with the two suppliers in question, ES Automobilguss and CarTrim.

As well as affecting production of the Passat and Golf, the disruption hit segments of transmission and exhaust systems production, chassis component production, plastic parts production, and of engine production, said VW’s statement.

The plants affected were in Edam, Wolfsburg Zwickau, Kassel, Salzgitter and Braunschweig.

The Financial Times reported the supplier issues began in June when VW abruptly cancelled a high value order from one of the suppliers.